Although US short seller Hindenburg Research on January 24 published the findings of a two-year investigation alleging that the Adani Group had engaged in market manipulation and accounting malpractices, it is, itself, into short selling of shares, which is considered unethical in many countries, the Dhaka Tribune reported, adding that its position as a short seller may influence the positions it takes.

As per the agreement with the Bangladesh government, Adani set up a power plant in the Godda district of Jharkhand and once the plant starts to produce power, it will supply electricity to Bangladesh for the next 25 years, the newspaper article said, adding that Dhaka signed the deal with Adani Power back in 2017. Further, according to the report, the Adani Group as a whole is being talked about following the Hindenburg report, and therefore, taking advantage of it, the anti-government elements in Bangladesh started talking against the deal the government signed with Adani Power.

All the critics can muster, is to provide vague anecdotes and sometimes absolutely false information to criticize the power deal with Adani, the report stated further.

Transparency International Bangladesh (TIB) mentions in one of its statements, “According to national and international media reports, the electricity generated from the Adani power plant located in Godda, Jharkhand, will cost almost three times more than the electricity produced in the country.”

To understand the whole deal, it is important to know about the cost of power production by using different conventional energy sources.

The cost of production of electricity by different fuels within Bangladesh at current (international) market prices is given below:

(1) Cost of power generation with diesel is Tk (Taka) 30 per unit

(2) Cost of power generation with imported gas (imported LNG) is Tk 20-22 per unit

(3) Cost of power generation with furnace oil is Tk 18-20 per unit

(4) Cost of power generation with imported coal is around Tk 14 per unit.

As per the report in Dhaka Tribune, in comparison to the above, through the Adani Power Project, Bangladesh will get power at Tk 15-16 per unit.

The age of this power plant of the Adani Group is estimated to be 25 years, the report stated further, adding that until its expiry, the power plant would essentially be owned by the government of Bangladesh. The government of Bangladesh will produce or not produce electricity (depending on the variation of seasonal demands) from the Adani power plant according to the needs of the people of this country.

Not even one kilowatt of electricity from this power plant can be provided anywhere else without the permission of Bangladesh, the report stated further, adding that this power plant will be dedicated for Bangladesh for 25 years. Although located in India, it is another power plant essentially owned by Bangladesh, at least for the next 25 years, just like other public or private power plants inside Bangladesh.

The cost of the Adani power project is roughly Tk 1-2 per unit more than the cost of power generation within the country with imported coal because a dedicated rail track was built for bringing in the coal and a dedicated transmission line was built to transfer the electricity to Bangladesh, the Dhaka Tribune reported.

The Adani power plant will also import coal from its own coal mine in Newcastle, Australia, the report stated further, adding that the cost of importing coal from Australia is slightly higher than that of importing coal from Indonesia. Bangladesh’s coal-fired power plants generally import coal from Indonesia.

Bangladesh has already built 4,500 MW of electricity (owned and imported) coal-fired generation capacity within the country. Another 3,500 MW of coal-based power is under process. However, it is currently not possible to generate more coal-based electricity within the country due to a number of reasons, reported Dhaka Tribune.

Since the 1,600 MW coal-based power project taken up by the Adani Group in India could not be done inside Bangladesh, therefore, this 1,600 MW of electricity inside Bangladesh would have had to be produced with diesel, furnace oil, or imported LNG instead of coal, the report stated further.

Contrary to popular perception, the Adani deal provides power to Bangladesh at a much cheaper rate than any other option other coal-fired plants, the Dhaka Tribune reported, adding that the Adani deal is a good deal for Bangladesh.

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